More than 300,000 households could be automatically moved onto more expensive ‘default’ energy tariffs in February, if they don’t switch tariff or provider within the next few weeks.
This is according to new data from comparethemarket.com, which shows that 167 fixed energy tariffs are set to finish this month. Those who are then moved onto the default tariffs will face a £66 rise in their bills, based on the average total cost to consumers.
To add to this, these households will then also face a further additional £96 increase to their bills in April. This is because the default energy price cap will change from its current level of £1,042, to £1,138 following Ofgem’s recent announcement.
However, these rising costs can be avoided if consumers look to use an online energy comparison service and switch to a cheaper deal before these new prices come into effect.
- Online energy comparison: find the best deals in your area now
Suppliers could benefit from huge ‘inertia windfall’
The new data also shows that the UK’s energy companies could benefit from an ‘inertia windfall’ of up to £20m a year, if customers on these tariffs fail to switch to a better deal.
Peter Earl, Head of Energy at comparethemarket.com, offered his thoughts on the data and encouraged consumers to take action while they can:
“Time and time again we see people fall into the inertia trap. If you do not switch your supplier at the end of your fixed term it is almost certain that you will end up paying more for your energy than you should be.
“With most people back at home due to coronavirus restrictions, energy consumption is likely to be much higher than usual, with bills increasing as a result.
"Those in a position to switch should consider doing so, as it will help reduce the overall amount you pay for energy and ensure you are getting better value for money. There is no better way to cut down on the cost of energy than by switching provider.”
Now is the time to switch
Finding a new deal is easy if you use an online energy comparison tool. In a matter of minutes you can find out what the best energy deals are right now and how much you can save with the UK’s best energy suppliers. However, those on the affected 167 tariffs should act before the month ends to avoid the impending price rises.
Equally, consumers already on SVTs and those who might be looking for a new provider may also want to run an energy price comparison, as there’s still the potential to find a better deal and make big savings.
